Steve "MrSmileyFaceDude" Meister informed us and Duck & Cover that he's written an article on the combat in the next title in the Elder Scrolls series, Oblivion. Here's a very interesting bit on yielding and the non-lethal combat present in the game:

And finally, combat need not be lethal. Any combatant - including the player -- can yield to their opponent. It's up to the opponent to accept the yield or not, but if they do accept, combat ends. It's a way to get out of those sticky situations where you find yourself in over your head. Just don't try it with a creature or with anyone who really, really hates you! And if an NPC yields to you, you make the call - walk away, or keep fighting.

It'll definitely eliminate the need to reload the game whenever you find yourself in an awkward situation with a sentient enemy. Reloading always destroys immersion.